Step 1: Ratio Analysis
1. This assessment task involves you calculating a range of ratios for your firm and using these ratios to assess the business performance of your firm.
2. Go to the ‘Ratios’ tab in your firm’s spreadsheet. In this worksheet is a list of ratios. Please calculate these ratios for your firm. Calculate these ratios for the last three (3) years for your firm. Do this by linking back to the numbers in your firm’s financial statements (in your ‘Financial Statements’ worksheet) or to the numbers in your firm’s restated financial statements (in your ‘Restated Financial Statements’ worksheet). If you are unsure about how to link cells between worksheets in Excel, see this short video about how to link cells between worksheets (control + click on this link):
Step 2: Capital Budgeting
Develop a capital investment decision for your firm. This decision should involve a choice between two options and involve you discounting cash flows for between 5 and 10 years.
Please use a required cost of capital of 10% (Hint: This is the discount rate to use).